Filed under: Credit repair

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Minnesota AG sues Discover over ‘protection’ fees

Minnesota Attorney General Lori Swanson is suing Discover over allegations that the credit card company charged customers for unauthorized account protection programs such as credit score tracking and identity theft protection.

Swanson filed a lawsuit Monday in Hennepin County District Court against Discover Bank, DFS Services and Riverwoods-based parent company Discover Financial Services. Discover is one of the nation’s largest credit card companies. Get the full story »

State sues credit-rescue firms for ‘preying on Poles’

The Illinois Attorney General’s office filed a lawsuit against Chicago-based Illinois Loan Modification LLC, Omega Business Center, its managers and related businesses, alleging that they preyed on residents of the Chicago-area’s Polish community by falsely promising mortgage and credit card relief.

The suit, filed Tuesday  in Cook County Circuit Court, charged that the companies and their affiliates charged upfront fees to consumers but the promised services were never provided and customers who canceled their contracts were not issued refunds. Get the full story »

No more up-front fees for debt fixers

Companies that claim to settle your debts for less than you owe can no longer charge up-front fees for their services. Instead, they have to wait to collect from consumers until they actually deliver on the promise.

The new rule goes into effect Wednesday and is part of the Federal Trade Commission’s effort to clamp down on deceptive debt-settlement practices. Get the full story »

Discover reports more on-time card payments

Credit card default rates mostly fell in September, but improvements in late payments slowed for most of the major card issuers. American Express, Discover, Chase, Bank of America and Citibank all submitted regulatory filings Friday that said September charge-offs fell to the lowest level this year.

Shareholder sues to bar Discover’s Citi deal

A Student Loan Corp. shareholder has sued to block the sale of the company by majority owner Citigroup Inc. because it benefits the Wall Street bank at the expense of minority investors, according to a lawsuit.

Citigroup, which owns 80 percent of the Stamford, Connecticut-based student lender, agreed last week to sell it to Discover Financial Services for $600 million. Get the full story »

Discover Card charge-offs rise in August

Discover Card wrote off balances for nonpayment at a higher rate in August than the prior month, after seeing improvement the two prior months.

Study: Lower credit scores in minority communities

Consumers living in minority communities were more likely to have non-prime credit scores, while individuals in mostly-white neighborhoods were more likely to have prime credit scores, according to a report released Tuesday by Woodstock Institute.

The Chicago-based non-profit research group into fair lending issues found that 20.3 percent of Illinois residents had credit scores below 620, a common cutoff point to be considered for prime interest rates. Get the full story »

Analyst: Amex payment data out of sync

American Express tells online customers that they’re 30-plus days past due when they’ve only missed their payment deadline by a few days, according to a study released Monday on late-payment policies of credit card companies. Get the full story »

More words of warning on mortgage modifications

It’s time for some more words of warning on how good intentions can mess up your credit report or credit score as you try to get mortgage payments you can handle.

Since writing about how mortgage modifications can tarnish your credit score, I have heard from many well intentioned people who ended up with a credit disaster as they tried to do the right thing with their mortgages.

American credit scores sinking to new lows

Figures provided by FICO Inc. show that 25.5 percent of American consumers — nearly 43.4 million people — now have a credit score of 599 or below, marking them as poor risks for lenders. It’s unlikely they will be able to get credit cards, auto loans or mortgages under the tighter lending standards banks now use.

Quinn signs law limiting payday loan interest rates

Payday loan companies will face limits on how much interest they can charge under legislation Gov. Pat Quinn signed into law this afternoon.

Under the new rules, interest rates would be capped at 99 percent for consumer installment loans of $4,000 and less and at 36 percent for loans that are $4,000 or more. Previously, there were no limits on how much loan companies could charge in interest, and some borrowers were smacked with rates as high as 700 to 1,000 percent, according to Quinn’s office.

“Access to credit is the key to economic life not only for business, but for every single person,” Quinn said. “The word ‘credit’ in Latin means ‘to believe,’ it doesn’t mean ‘to gouge.’ So it’s important to those who offer credit to follow some basic rules in the market place that protect consumers from being gouged.”

Credit checks bill awaits governor’s signature

By Julie Wernau
A bill that would prohibit employers from inquiring about or using a
person’s credit history as a basis for employment or discharge has
passed both legislative chambers in Springfield, and is awaiting the
governor’s signature.

The bill, House Bill 4658, introduced by Rep. Jack D. Franks
(D-Woodstock), creates the Employer Credit Privacy Act, and provides
exemptions for the banking and financial industry and state law
enforcement and investigation units. The bill passed the Senate on May 4, and the House of Representatives concurred on minor changes made to the
bill Thursday.

Get the full story »

Bernanke: Banks should lend to the credit worthy

Associated Press | Regulators must do all they can to help banks make loans to credit-worthy borrowers, especially small businesses, a development that’s critical to strengthening the economic recovery, Federal Reserve Chairman Ben Bernanke said Thursday. It’s a delicate dance for the Fed and other banking regulators. As regulators encourage banks to make loans to sound borrowers, they are also working to make sure banks get back on firmer footing after suffering through the worst financial and economic crises since the 1930s.

Get the full story: Bernanke says banks should loan to the credit-worthy.

Discover says loan losses slowed in March

Associated Press via NYTimes | Discover Financial Services said in a regulatory filing
Thursday that its loan losses slowed in March, as more customers were
timely on their credit card payments.

Get the full story:

Credit reports: Who’s looking at yours? And why?

Credit-Web.jpg(AP Photo/Elaine Thompson)

Associated Press | Now that it will be easier to find your free credit report, you may be curious about who else can see it and how it can be used.

Starting Friday, a new Federal Trade Commission rule will require Web sites advertising free reports from agencies such as Chicago-based TransUnion to direct consumers to the government-approved TV and radio ads must do the same starting Sept. 1.

The problem is that these ads typically don’t disclose that the advertised free reports are part of a package of services that can cost as much as $14.95 a month. Consumers may not realize they can get free reports with no strings attached.

Get the full story »